Apple may still demand 30% app commission, regardless of payment method
Apple could pursue its 30% commission no matter where or how payments are collected by developers, side-stepping some financial aspects of alternate payment methods altogether.
Apple could collect its 30% commission no matter the payment method
When developers submit an app to the App Store, any money made from the app via its sale, in-app purchases, or in-app subscription is subject to a 30% fee. The court ruling in the Epic versus Apple case allows developers to point to external payment options, but Apple may still collect its 30%.
According to a report from Bloomberg, the 185-page ruling against Apple doesn't have provisions preventing Apple from collecting its commission on external sales. In fact, the document doesn't have any requirements surrounding the commission, only noting that Apple hasn't shown the 30% rate is "justified."
"Apple has the legal right to do business with anyone they want," Paul Gallant, managing director at Cowen & Company, told Bloomberg. "So Apple could change the terms of the App Store and say to developers, regardless of where you collect your revenue, you owe us 30%, and if developers refuse to pay it, Apple would be free to de-platform them."
Apple's CEO Tim Cook has previously stated that if alternate app stores or payment options were introduced, it would cause difficulties for Apple. Instead of processing payments to developers and collecting its fee, Apple would have to bill developers separately.
"We would have to come up with an alternate way of collecting our commission," continued Cook. "We would then have to figure out how to track what's going on and invoice it and then chase the developers; it seems like a process that doesn't need to exist."
Such a move could cause an uproar amongst developers and disgruntled regulators. Apple is already under investigation for monopolistic control over its App Store, and aggressive action for commission collection would reinforce that narrative.
"The more likely path is for Apple to think seriously about reducing its commissions," Cowen's Gallant said. "I think the pending legislation in the U.S. and Europe and Friday's court ruling increase the prospects for Apple to make a move on commissions."
Apple hasn't sought to challenge the ruling yet, though Epic has. Reactions to the Epic versus Apple ruling have been widely varied, with confusion over which company came out on top.
Read on AppleInsider
Apple could collect its 30% commission no matter the payment method
When developers submit an app to the App Store, any money made from the app via its sale, in-app purchases, or in-app subscription is subject to a 30% fee. The court ruling in the Epic versus Apple case allows developers to point to external payment options, but Apple may still collect its 30%.
According to a report from Bloomberg, the 185-page ruling against Apple doesn't have provisions preventing Apple from collecting its commission on external sales. In fact, the document doesn't have any requirements surrounding the commission, only noting that Apple hasn't shown the 30% rate is "justified."
"Apple has the legal right to do business with anyone they want," Paul Gallant, managing director at Cowen & Company, told Bloomberg. "So Apple could change the terms of the App Store and say to developers, regardless of where you collect your revenue, you owe us 30%, and if developers refuse to pay it, Apple would be free to de-platform them."
Apple's CEO Tim Cook has previously stated that if alternate app stores or payment options were introduced, it would cause difficulties for Apple. Instead of processing payments to developers and collecting its fee, Apple would have to bill developers separately.
"We would have to come up with an alternate way of collecting our commission," continued Cook. "We would then have to figure out how to track what's going on and invoice it and then chase the developers; it seems like a process that doesn't need to exist."
Such a move could cause an uproar amongst developers and disgruntled regulators. Apple is already under investigation for monopolistic control over its App Store, and aggressive action for commission collection would reinforce that narrative.
"The more likely path is for Apple to think seriously about reducing its commissions," Cowen's Gallant said. "I think the pending legislation in the U.S. and Europe and Friday's court ruling increase the prospects for Apple to make a move on commissions."
Apple hasn't sought to challenge the ruling yet, though Epic has. Reactions to the Epic versus Apple ruling have been widely varied, with confusion over which company came out on top.
Read on AppleInsider
Comments
I'd also add some system where any link leading outside of the walled garden carries warnings.
The 30% commission is not just a processing fee, it is also a charge for use of the Apple IP, hosting infrastructure and running the App Store.
Apple has the right to charge for this, irrespective of the payment method used.
Free market Puritanism may keep you ideologically satisfied, but it won’t shield you from the opinion of a judge who feels like you’re making a mockery of a ruling.
You're justifying freeloading.
"Could you see someone going to a Ford dealer, picking out a truck, then telling the dealer you're not going to use their payment system and pay John Doe around the corner for the truck? They'd laugh you out of the building. This is why the judge made an improper decision."
I don't think this metaphor is quite right. Consider this: Ford saying "you can get your oil changed at a third party service center, but we are collecting 30% of whatever you pay them,,"
Ford does not offer any assistance, equipment or supply the oil, for a third party oil change service. Thus do not deserve to collect a commission.
Here, Apple is operating an App Store, develop and maintain the OS that developers rely on to run their apps, offer assistance in making sure the app runs properly in iOS and spend RD money to attract consumers to use iOS devices. Apple deserve to collect a commission from developers that makes money selling apps on iOS to Apple customers. Otherwise Apple can charge rent, like a shopping mall, where the developer is not guarantee to make a profit, if they don't make enough to pay the rent.
It's more like this. A third party oil change service wants Ford to supply them with the space, equipment and oil, so they can make money changing the oil for Ford customers, but don't want to pay Ford a commission.
"The Supreme People’s Court in China ruled that a lawsuit filed by a Chinese consumer against Apple’s China entity on antitrust grounds could proceed in a Shanghai court, rejecting Apple’s plea that its China entity, which mainly distributes Apple’s products in China, should not be sued over issues related to App Store operations ...
In its ruling published last Monday, China’s top court said Apple had potentially abused its market position and undermined competition – that is why the case can be heard.
The case involves Jin Xin, who is demanding Apple stop charging 30 per cent commission on purchases in the China App Store, and to allow Chinese consumers to make payments through wallets other than Apple Pay, to provide 100,000 yuan (US$15,500) in compensation and to issue a public apology […]
In his lawsuit Jin alleges that the prices of in-app services offered by apps in Apple’s App Store, including video app iQiyi, podcast app Himalaya, and music app NetEase Music, are higher than in Android app stores – possibly as a result of Apple’s 30 per cent App store commission. Jin also cites China’s Anti-Monopoly Law in accusing Apple of “anticompetitive” practices."